Public Bill Committee

[Mr. Mike Hancock in the Chair]

Mike Hancock: Before we begin, I wish to say for the comfort of hon. Members that if anyone wishes to take off their jacket, please do so. Will they also ensure that mobile phones are on vibrate or silent? I remind the Committee that, as a general rule, adequate notice has to be given of amendments. I do not intend to call starred amendments.

Andrew Miller: I beg to move,
That, if proceedings on the Temporary and Agency Workers (Equal Treatment) Bill are not completed at this day’s sitting, the Committee do meet on Wednesdays (except for Wednesday 4th June) when the House is sitting at half-past Nine o’clock.
This is the second time that I have served under your chairmanship, Mr. Hancock, and the first when I have been leading on a Bill. You and I go back rather a long way.

Mike Hancock: Too long.

Andrew Miller: Too long, but no doubt we agree wholeheartedly that any attempt to amend the sittings motion so that the Committee sits on 17 May should be regarded as out of order, given that there is an important match on that day.
It is something of an unusual sittings motion for a private Member’s Bill, given that we are sitting on Wednesday mornings with the exception of 4 June. The Regulatory Reform Committee of which I am Chairman is undertaking a small study that will result in the hon. Member for Solihull and I being out of the country on that day. That is the reason for the exception.
With your indulgence, Mr. Hancock, and that of your fellow Chairman, Mr. Martlew, I shall at an appropriate time come back to the Committee with an amendment to the sittings motion to enable us to complete our business, but several events make that inappropriate at present. My hon. Friend the Minister for Employment Relations and Postal Affairs and the hon. Member for Huntingdon referred to such matters last night in the debate on the money resolution.
A discussion is being held outside this place to address a matter that all members of the Committee believe needs to be resolved at the earliest date. It concerns a proper mechanism and whether the solution lies with the Bill or with a different process that no doubt my hon. Friend the Minister will explain in some detail. It is appropriate that the Committee is appraised of the progress that has been made in discussions. That will be particularly helpful because it will set the tenor of how we progress through the Bill and identify the fundamental divisions between the parties. That started to show itself yesterday evening when we were discussing the money resolution.
Of course, the vote on the money resolution has yet to take place. If it is negatived or if we get to clause 4 today—I doubt that we will—we will be in a slightly difficult position. If the vote on the money resolution is negatived this afternoon, I propose to come forward with amendments to remove the necessity for a money resolution. However, that would not give the kind of flexibility that I think the current Minister and future Ministers would need to create the right mechanism to address the problem before us.
You will chastise me, Mr. Hancock, if I go into too much detail on the substance of the Bill, but suffice it to say its core aim is to create equal treatment for a class of workers who are currently in a disadvantaged position. I would have thought that in this day and age there would be no difference of opinion across the political parties on the need to address such an issue.

Mike Hancock: Order. I have to interrupt you, Mr. Miller, as you are inviting chastisement if you continue down that line. We are talking about the sittings motion and you have got as far as you can on that.

Andrew Miller: I spotted where I was going and was gradually bringing the sentence back round to be in order. The purpose of the approach that I am adopting with the sittings motion is to create the maximum opportunity for the discussions that are going on outside this place to come to a conclusion so that we will, I hope, be in a position either to invite the Committee to amend the Bill further or consider a different approach, depending on where the Government get to in those discussions.
Because of the constraints of the sittings motion and the need to keep in order, I will stop my remarks there, but I hope that you will agree with me, Mr. Hancock, that it would be extremely helpful to the Committee in facilitating its plans if Her Majesty’s Government could give us a clear picture on where those discussions have got to.

Greg Knight: I apologise for missing the beginning of the hon. Gentleman’s opening remarks. He might have covered this point, but could he explain, if for no one else’s benefit but mine, why he does not want to sit on the 4 June if we do not complete matters today.

Andrew Miller: I explained that, and it is on the record. It is simply because I will be out of the country on Select Committee business, as will the Liberal Democrat spokesman.

Mike Hancock: It is slightly out of the ordinary but to facilitate the working of the Committee, it would be helpful if the Minister could make a brief statement. I discussed that with the Opposition and with the Liberal Democrats and it will be a brief statement that is open to challenge if Members so choose.

Patrick McFadden: May I welcome you to the Chair, Mr. Hancock? I should begin by congratulating my hon. Friend the Member for Ellesmere Port and Neston on his success in bringing the Bill to Committee stage. On Second Reading, I stated that the Government’s position was that we do not support the Bill, but share many of the overall aspirations of its promoter and its other supporters. It is not the best vehicle for achieving such aims, but I will say something about the Government’s view on these issues.
The backdrop to the measure begins with the draft European directive on temporary and agency workers, which has been under discussion for some time in Europe. The Government are engaged with the Commission and other member states in trying to seek agreement on the directive. That route is the best mechanism for dealing with the issue of temporary and agency working. If we legislate through the Bill or something similar, the danger is that such legislation would be subject to change in the relatively near future, should the directive become law.
Part of the impetus behind the Bill has been the view that the directive is unlikely to become law, and therefore we should legislate domestically. However, at the meeting of the European Employment Council in December, the Secretary of State for Business, Enterprise and Regulatory Reform made it clear that the UK would continue to work with the European Commission and other member states to try to reach agreement on the directive.
A number of issues in the directive remain open for discussion with regard to the extent of equal treatment and where and how it should apply. We have made it clear that from the Government’s point of view, the current text on some of those issues is not satisfactory. Our proposal tries to deal with those issues and to square this circle. The directive is not only about the equal treatment of agency workers, but about the liberalisation of the agency sector—something on which the Bill is silent. That is an important part of the package at European level.
The Government’s proposal tries to take the issue forward. The backdrop is a draft directive that allows flexibility for other member states with different types of labour markets and different traditions of engagement between unions, business organisations and social partners on such matters. That includes draft derogations for certain member states with specific institutions that relate to payment between assignments, or the fixing of basic working and employment conditions by collective bargaining for member states who use that labour market model. The Government proposal is a carefully drawn alternative measure underpinned by a bottom-line requirement to ensure an adequate level of protection for workers. We seek to bring social partners together to consult at a national level and to discuss basic working and employment conditions to achieve the directive’s goal of fair treatment for agency workers. That is important because it relates both to UK conditions and European measures.

Mike Hancock: Order. When I suggested a brief statement, I implied that it should be brief. We have now embarked on to what could be considered a Second Reading speech.

Jonathan Djanogly: On a point of order, Mr. Hancock, will this statement be on the record?

Mike Hancock: It is on the record.

Jonathan Djanogly: Will it appear in Hansard?

Mike Hancock: Yes, it will.
I urge you to draw your remarks to a conclusion, Mr. McFadden, now that you have described what has gone on. I will then invite members of the Committee to comment. One or two Members have suggested that this has nothing to do with the sittings motion, but I was endeavouring to help the Committee get a feel for where the Government were going on the issue in order to enable the debate to move forward in what I hope will be a progressive manner. Mr. McFadden, I invite you to bring your remarks to an end.

Patrick McFadden: I appreciate your guidance, Mr. Hancock. You have been extremely helpful in guiding me and the Committee. The point I am trying to make is that the Government have introduced a proposal to consider the issue of agency workers at a UK level in a way that would fit with the directive and obviate the need for us to legislate on the issue twice, which is the danger.
On the sittings motion, I believe that we are meeting in Committee at the same time as discussions are taking place. A conclusion has not yet been reached, and our social partners have not yet agreed to take part in the process. The Government see significant potential in the kind of process that I have set out. It would involve our social partners and would have the advantage of our not having to return to legislate on the same issue after these deliberations have concluded.

Jonathan Djanogly: I shall want to speak later to the sittings motion, Mr. Hancock, but on this point, if that is the case, why do the Government not suggest that, or table a motion to the effect that, the Committee adjourn until such time as the discussions in Europe have been completed?

Patrick McFadden: The sittings motion is in the hands of my hon. Friend the Member for Ellesmere Port and Neston, but I point out to the Committee that the danger of our reaching a conclusion on a domestic Bill such as this is that we would have to return to the issue. That is why the Government believe that a UK proposal that reflects the directive is the best way to deal with the matter.

Adam Price: The Minister mentioned the discussions happening at EU level. Could he say a little about the discussions happening in the UK between trade unions and the Government? To what extent do they have a bearing on the issue?

Mike Hancock: Order. We must be careful not to resurrect the Second Reading debate and go back over old ground. I understand the question, Mr. Price, and I hope that the Minister will briefly answer it. Then we will move on quickly to other Members who want to comment on the sittings motion and on what the Minister has said. To be fair to the Bill, we need to do it in that way. The hon. Member for Ellesmere Port and Neston, who is presenting the Bill, has to think long and hard about what has been said by Members, which might not be unhelpful.

Patrick McFadden: Thank you, Mr. Hancock; again, I take your guidance. The discussions are ongoing. They are active, but they have not reached a conclusion.
I do not need to detain the Committee further. I have set out the Government’s broad proposal, which I reassure the Committee is a live proposal. We believe that it is the best way to deal with the issue. I have spoken about it today to inform members of the Committee about it before we begin consideration of the Bill.

Greg Knight: On a point of order, Mr. Hancock. I do not think I have ever served on a Bill Committee where the Minister has been so critical of the sittings motion. It appears that the Committee has a dilemma. The sittings motion has been moved, yet the Minister says that it would be better to delay our deliberations. Moreover, in the light of the fact that the House has not yet determined the money resolution, would you be prepared to accept a manuscript amendment to the sittings motion, Mr. Hancock, to deal with the difficulties that have arisen during the debate?

Mike Hancock: It is up to the Committee to decide how to deal with the sittings motion. Members should think long and hard about what has been said and the advice that has been given. I do not believe that it would be right for the Chairman to accept a manuscript amendment at this stage; that is the advice that I am getting.
We must now discuss the sittings motion and the implications of what the Minister has said. I urge the hon. Member for Ellesmere Port and Neston to think long and hard about the matter.

Greg Knight: Further to that point of order, Mr. Hancock. Will you advise the Committee where it would leave us if we negatived the sittings motion and the Bill therefore had before it no sittings motion?

Mike Hancock: Were that to happen today, the Member in charge would have to facilitate a further meeting of the Committee to enable a further sittings motion. That is in the hands of the Committee. It is a bit messy, I am sorry to say, but an inevitability of that would be that we would have to find another date, set the Committee again, and the Member would have to come forward with a further sittings motion.

John Heppell: Further to that point of order, Mr. Hancock. If the sittings motion is agreed to today, would it be possible to amend it at a future meeting?

Mike Hancock: Yes, that would be in order. I now call Mr. Djanogly.

Jonathan Djanogly: Thank you, Mr. Hancock, and good morning. I appreciate that this has been a tough one for you because in some ways, we are continuing a conversation that started rather late last night, as you have probably gathered by now. We addressed this issue then—or, more to the point, I addressed it. I pointed out clearly the dilemma and the contradictions in the Government’s position on the timing of the negotiations on the directive in Brussels, the ongoing negotiations with various parties to the Bill, and the Government’s rather weak and failing earlier attempt at a compromise—setting up a commission between the unions and business, which seems to have been going rather pear-shaped. The net effect is that three different processes are running.
I am pleased that the timing implications are now at least being admitted by the Government, which I do not think they were by the Minister last night on the Floor of the House. At least this morning he admits that this process is undermining the Government process that is running in Brussels, and that we need to address that. I am not entirely sure that the debate so far has addressed that. In some ways, the situation is looking even more confusing than ever. The only rational outcome that I can see of what the hon. Member for Ellesmere Port and Neston and the Minister had to say is that we defer the Committee until we know what is going on in Europe, and until the Government have heard from the committee they set up to take soundings on this issue. Until that happens, I think that we must oppose the motion. I hope that the Government see sense on this and support us. Yes, we will discuss this issue, but we do not want contradictory Bills running through the House. If anything, that would create a huge headache for the Government.
There is a difference between the positions of various Government Members. The Minister made a case for what is happening in Europe, and talked about some key issues for employment in this country. If anything, the Government should make a statement on the Floor of the House, not an aside in a sittings motion debate in a Committee. He may therefore wish to consider whether he should make such a statement on what is a very important issue for British business. On the other hand, the hon. Member for Ellesmere Port and Neston seems to be using this as leverage for the union rebels’ position, keeping it hanging over the Government’s head just in case. Given the seriousness of the issues we are discussing, that is unacceptable and I ask him to reconsider. Let us face it—all parties are in agreement that the Bill should not be passed. I therefore ask that he reconsider and that the Committee be adjourned.

Lorely Burt: I welcome you to the Chair, Mr. Hancock.
I find myself in agreement with the hon. Member for Huntingdon. Given what we have heard so far, it would be best on all sides if we deferred the Committee stage. I understand the strength of feeling among Members on the Labour Benches who have striven for a long time for this Bill, which they consider would rectify an inequality that exists for agency workers. It is important that they have their say, even though I and Conservative members of the Committee will not necessarily subscribe to the view that it is an inequality. However and as the Minister said, all three parties, in the main, do not support the Bill. The Government are engaged on European legislation that duplicates the work of the Committee, and on Second Reading on 22 February the Minister said that he would create a commission with the TUC and the CBI to take the issue forward. We are not trying to ditch the Committee stage, but it would help if we applied a more appropriate time frame to the Bill. That is why deferment of consideration would be appropriate at this stage, and for the benefit of all.

Greg Knight: I join others in welcoming you to the Chair, Mr. Hancock. I make no criticism of the hon. Member for Ellesmere Port and Neston for exempting 4 June; I was grateful for his explanation, and one can understand why he does not want the Committee to sit on that date. However, I found it bizarre that he went on reveal that if the House took a negative view of the money resolution, our deliberations today might be in vain because he would have substantially to amend the Bill. For that reason alone, we should not proceed with today’s sitting. The Minister then gave other, perhaps even more weighty reasons for doing so when he referred to discussions taking place elsewhere.
I understand the attitude of the hon. Member for Ellesmere Port and Neston—the Bill is his baby and he wants to get on with it—but it is incumbent on the Committee to take a more objective view and to ask, “What is the best way to proceed?” I do not want to deny the hon. Gentleman a Committee stage, but I would prefer it to take place after we know the view of the House on the money resolution and after the Minister has concluded at least some of the negotiations that are taking place, so that he can tell us what the position is, which hopefully will crystallise in the near future. The more that I hear the promoter of the Bill and the Minister, the more there is an overwhelming case for not proceeding today.

Mike Hancock: In the absence of anyone else indicating a wish to speak, I invite the hon. Member for Ellesmere Port and Neston to respond.

Andrew Miller: The difference between us is somewhat academic. The Conservatives indicated, I think, last night that they intend to oppose the Bill hook, line and sinker.

Jonathan Djanogly: Correct.

Andrew Miller: So I am correct on that. I intend to get the Bill to Report and Third Reading stages by the fifth of the six Fridays available for private Members’ Bills. The right hon. Member for East Yorkshire knows the score on that well.
We could conduct the debates slowly and steadily through the various clauses, with the possibility that an agreement is reached between the Government and the social partners prior to the Bill coming back to the House from the Lords, and that we are in a position to say that we do not need it. Alternatively, the Bill could come back from the Lords with no agreement having been reached—then, the position would be that the express will of the House on Second Reading was that we need the Bill. That is the logic of the position that I have adopted.
I am hopeful that we can make progress. The hon. Member for Huntingdon is absolutely right that three processes are on the go simultaneously. Whatever happens with the discussions in Europe, there has to be domestic legislation—either a directive emerges, or the Government simply abide by their commitment to addressing the problem. If I have understood the hon. Gentleman’s position, he will oppose such legislation, full stop, so we know where we stand.

Jonathan Djanogly: We will look at the legislation as put before the House at the time. We are now addressing the hon. Gentleman’s Bill, which we will oppose.

Andrew Miller: I hear what the hon. Gentleman says. He is clearly on the record as being opposed to agreeing to equal treatment of that class of workers.

Jonathan Djanogly: The hon. Gentleman must be careful about putting words in my mouth. I will say that the Conservative party is against the proposed European directive in its current form.

Andrew Miller: I do not seek to put words in the hon. Gentleman’s mouth, but he ought to reflect on what he said last night.
Our position is that changes could occur, because of changes in Government and in the strategy being adopted elsewhere in Europe. However, the Government are committed to addressing the problem—with or without Brussels.

Adam Price: The draft directive has been there for four years. Does the hon. Gentleman not agree that if we wait for agreement at European level, we may be waiting for ever? That is why his motion is so important, and why the Committee should get on with the work of putting something on the statute book.

Andrew Miller: I agree entirely with that view. The delay in delivering the necessary change—the Government have been blamed for some of the reasons for that, and other Governments have been blamed for others—resulted in my introducing the Bill. It is a perfectly modest Bill, which falls within the scope of private Members’ legislation. It is not seeking to rewrite all employment law and affects only a small group of workers, who, nevertheless, constitute a vulnerable group; exactly who we will discuss as the Bill progresses.
With those observations in mind, I ask the Committee to support the sittings motion as it stands.

Question put:—

The Committee divided: Ayes 7, Noes 6.

Question accordingly agreed to.

Resolved,
That, if proceedings on the Temporary and Agency Workers (Equal Treatment) Bill are not completed at this day’s sitting, the Committee do meet on Wednesdays (except for Wednesday 4th June) when the House is sitting at half-past Nine o’clock.

Clause 1

Equal treatment of agency workers

Lorely Burt: I beg to move amendment No. 1, in clause 1, page 1, line 2, leave out ‘, or employment agency,’.
I had wanted to table an amendment to deal with the lack of a definition of “temporary worker” in the Bill, and thus to leave out any reference to the term. I have been unable to do so because such a description is part of the long title, but I will table an amendment of that nature in the future. A “temporary worker” could be a synonym for an agency worker, in which case it is not required, but it could be something else, such as a worker supplied on secondment by an employer to a client. It could be a temporary worker engaged directly by the employer, but it is difficult to make progress on a Bill when we do not know what the reference to “temporary worker” means. I should therefore be grateful if the hon. Member for Ellesmere Port and Neston would explain what he means by a temporary worker as that may enable us to make progress on the Bill.
This amendment would leave out the reference to “employment agency”. That expression is not appropriate and it is an example of the confused thinking that unfortunately is found in the Bill. Employment agencies find employment for employees with employers. They do not employ workers, so how we can compare whether they have meted out less favourable treatment in employment when the relationship between themselves and the worker ceases when the worker has the job?

Jonathan Djanogly: I am also unsure why employment agencies have been included in the provision. Under the definition in the Employment Agencies Act 1973, an employment agency provides services for the purposes of finding individuals employment or of supplying employers with employees. When that service is being carried out, the individual seeking work has no contract with the employment agency. It therefore makes no sense to compare the treatment of the said individual by the employment agency with a person who is employed under contract as a direct worker.
Amendment No. 2 is a strike-out provision with which we agree, but we consider that it should be discussed in the context of the clause as a whole. I therefore intend to include it in my comments on the clause stand part debate.

Andrew Miller: This is an important amendment, and I hope to explain in a few moments why it should be opposed. It would leave many unprotected, because only employment businesses would be covered. The previous Bill on the same subject that the House looked at last year was confined to employment businesses, but it is not entirely clear from the record why that was the case. These businesses employ workers on a temporary basis for an end-user, so it follows that an employment business is responsible for paying their employees. Colleagues will remember that on Second Reading I dealt with an example of exactly that circumstance from Calor Gas, where two people had been employed as temps for 12 and eight years respectively.
Confusingly, the employee of an employment business is often referred to as an agency worker. An employment agency will introduce a work seeker to a hirer or end-user. The hirer may take the work seeker on with a permanent contract as an employee at the outset and pay a fee for that introduction. There is a reputable agency in my constituency that prides itself in doing just that: seeking to place people into temporary situations with a view to planning their progression into permanent employment with that employer. That is a welcome approach by that agency, and fees will be paid for that introduction.

Lorely Burt: I am trying hard to follow exactly what the hon. Gentleman is saying. The idea of permatemps is very welcome, and it is one that many employment agencies use, as he has just mentioned. However, at the same time, he is encompassing within the net all employment agencies, whether or not they supply temporary workers, so I am still concerned that employment agencies who have nothing to do with temporary workers will fall within the compass of the Bill.

Andrew Miller: That is precisely why I referred to the example I gave on Second Reading regarding Calor Gas, when it transpired at the closure of the depot that two people had been employed through an agency for 12 years and eight years respectively. I am sure that the hon. Lady, in tabling her amendment, is not seeking to justify that kind of employment practice.

Lorely Burt: Indeed, not. I hope that the discussions between the Government, the TUC and the CBI will result in some sort of resolution for the workers that have been referred to as permatemps. Their status should really be that of employees. However, that is not what we are referring to here.

Andrew Miller: The hon. Lady is right and wrong simultaneously. I understand where she is coming from in relation to certain categories, and it may be that the scope that is set out later in the Bill for defining categories of workers through secondary legislation could be finessed so as to take on board that legitimate concern and to address some of my observations at the same time.

Lorely Burt: I am grateful, because the hon. Gentleman is being very patient with me. Does he agree that it is not necessary to include the term “employment agency” in the Bill because we can finesse temporary agency in definitions to include temporary staff who are then taken on as employees?

Andrew Miller: I cannot see the merit in doing what the hon. Lady says. I would rather do it the other way round and ensure that all categories can be encompassed by the Bill, and that any class of employee who should not be covered by our attempts to address the needs of vulnerable people in difficult situations is covered through secondary legislation allowing groups to be excluded.
An agency workseeker might be required on a temporary or fixed-term basis, and the hirer might pay the agency, on an hourly basis, a proportion of what is passed on to the worker. In addition, a contract between a worker and an agency often states specifically that the worker is not an employee of the agency and that the agency does not guarantee work. There will be no contract between the worker and the hirer in most cases.
Those circumstances are incredibly unsatisfactory, and while it is feasible to identify areas, as the hon. Lady has done, in which one might question the need to use an all-embracing approach, as I have sought to do in the Bill, it would be inappropriate at this stage to exclude any category.

Philip Davies: I am grateful to the hon. Gentleman for giving way because I am becoming confused. I certainly support the points made by the hon. Member for Solihull. Is not there a distinction between employment businesses that employ temporary workers and then place them with specific companies, and employment agencies that simply point people in the right direction of a post and have no employment for them? I do not understand how on earth there can be a requirement on employment agencies when they have nothing to do with the employment.

Andrew Miller: That is because, as I tried to explain earlier, that simple definition does not hold because not all employment agencies are like Jobcentre Plus. They are not just placement agencies, and therein lies the difficulty. I understand what the hon. Gentleman is saying about people who are appointed to a temporary or permanent job when the agency no longer has any responsibility for them, other than perhaps to collect a one-off fee. That category of person is not the same as the category that is appointed through an agency and continues to have a daily relationship with the agency. The categories are different and both can come through employment agencies. There is confusion about what happens in the marketplace.

Philip Davies: But does the hon. Gentleman accept that without the amendment his Bill would cover all those businesses, irrespective of where they are, and would put unnecessary, burdensome and unfair regulations on businesses?

Andrew Miller: The Bill would put no burden on someone who placed an employee in a temporary or permanent post and no longer had a relationship with them after collecting a one-off fee. I do not think that it would have any bearing on them, and it would certainly not be burdensome. If they were on a nice little earner, however, by collecting money from their relationship with that employee for a period of time, they ought to be covered. Some categories of agency could fall within the scope of the Bill, but others act in the same way as Jobcentre Plus.

Adam Price: In a nutshell, is the hon. Gentleman’s fear that the distinction between an employment agency and an employment business could be used by unscrupulous end users as a means of avoiding the requirements of the Bill?

Andrew Miller: That is exactly correct. It is incumbent on Parliament to create definitions that will work. It is easier to exclude people later than to return to the House and say, “We did not get it right, because we did not include a category of employee.” We need to cover all categories that might be involved.

Philip Davies: I am further confused. The clause covers employment businesses and end users. The amendment would simply remove employment agencies, so it would not reduce or diminish any responsibility on end users or employment businesses. It would merely remove the anomaly of including employment agencies that have nothing to do with the employment of the people concerned.

Andrew Miller: I do not know at what point either of us will get stamped on for repetition. I thought that I had just responded to that point. An agency might use part of its business to provide permanent or temporary work to people with whom it has no further contractual relationship, and another part to place people with whom it has a continuing financial relationship. I do not think that I can be any clearer than that, and that is why I urge the Committee not to accept the amendment.
The discussion has been useful, and I take the point of the hon. Member for Solihull that we need to be cautious and ensure that we get the definitions right, but as I indicated to the hon. Member for Carmarthen, East and Dinefwr, my preferred route is to start with all-encompassing definitions from which we exclude groups, rather than having to return to Parliament to build a list.

Patrick McFadden: The debate has highlighted the importance of definitions. As far as I can see, the debate about fair treatment for agency workers has been focused on people in temporary placements who work alongside permanently hired staff. There is perceived injustice and unfairness. There are some confusing terms because while we talk about agency workers and employment agencies, we also talk about employment businesses. The type of business that conducts a three-way relationship among the supplying organisation, the hiring end user and the worker in between is often an employment business, whereas employment agencies can include organisations, usually called head-hunters, that are engaged in the recruitment business, but in a different way. This is about having a client group of businesses and a client group of individuals, and matching up the two for the purposes of permanent employment.
As I understand my hon. Friend’s Bill, its aim is to legislate for equal treatment for those hired on a temporary basis, which can extend for longer than would normally be considered a temporary placement, and permatemps, as described by the hon. Member for Solihull. We are all concerned about people who have been engaged in placements lasting for years and years. On any normal understanding of the term, they would be regarded as permanent, but they do not have the status, protection and rights of permanent workers. That is somewhat different from someone who might be filling in on a sort of seasonal basis or to cover for short-term leave, or perhaps just working for events where there is a build up over a significant period although the event itself might last only a few days.
The first question that we must ask is what are we trying to legislate for. My understanding, both of the European directive and my hon. Friend’s Bill, is that there is an attempt to legislate for temporary placements and people who are covered by that. We will go on to have many discussions about qualifying periods during our consideration of the Bill, but we must start by saying that we are talking about people who are placed on a temporary basis.

Jonathan Djanogly: The Committee might be interested in the fact that as far as I can find out—I am prepared to be proved wrong—the Bill does not include a definition of a temporary worker.

Patrick McFadden: This is the heart of what we are discussing. If the Bill covered the activities of head-hunters, it would take us into a new field. It is one thing to try to regulate and legislate for the pay relationship—essentially we are talking about the pay relationship—between temporarily placed agency workers and permanent workers whom they work alongside. That in itself may be difficult, and sometimes there are no permanent workers working alongside. There is a difference between those people and those who are placed in a permanent post. I think it would take this legislation into a whole new area if we attempted—

Adam Price: What about the construction industry, in which there are agencies that recruit people who are technically self-employed? They are not employed by the end user or the agency. They have many of the characteristics of employees—they have set hours and their tools are provided—but the difference is that they have lower workplace rights than employees working side by side with them on the same construction site. That is why employment agencies should be kept in the Bill.

Patrick McFadden: The issue of self-employment in construction is often raised with the Government. Such people may or may not be supplied by employment agencies. There are a whole series of Inland Revenue issues associated with the question the hon. Gentleman raises, but I am thinking of people who are placed in what we would normally regard as permanent jobs. The point I am making is that if the Bill covers—it appears that it does given what my hon. Friend the Member for Ellesmere Port and Neston said, although that is unclear—the activities of head-hunters who place people in permanent jobs, that would take us into a whole new field of legislation, as that is certainly not covered by the directive. I am not sure whether it is my hon. Friend’s intention to go beyond the directive, but if it is not, he might need to look again at the issue so that whatever differences we have, we can at least be clear that we are talking about people who are placed in temporary posts, rather than the activities of head-hunters. If he does not wish to include head-hunters, perhaps he might outline that and suggest how he will deal with the definitions to ensure that the Bill does not unintentionally stray into that area.

John Heppell: I am becoming increasingly confused. I think I understand the difference between an employing business and the end-user and some employment agencies, but if an employment agency is of the sort that the Minister describes and might head-hunt and so on, how would the Bill affect it anyway if the provision is kept in?

Patrick McFadden: The fear is that the inclusion of both employment agencies and employment businesses in the definition would affect such agencies.

John Heppell: What would be the effect on employment agencies? If an agency does not have any employment issues, there is no problem. It is not going to happen.

Patrick McFadden: The concern is that the unintentional effect of the Bill could be that we imposed on head-hunters an ongoing relationship, in terms of equal pay and treatment, between those that they place and other permanent staff in the organisation in which they were placed. That has never been the intention of the European directive, which has always focused on temporary workers. I do not wish to put words in the mouth of my hon. Friend the Member for Ellesmere Port and Neston, but I do not believe that it is his intention to do so here either. The provision as it is drafted could stray into that area, and if that is not his intention, my question to him is how would he deal with that.

John Heppell: It seems to me that if the employment agency has no contractual relationship with the workers in the first place—that is the sort of agency that the Minister is talking about—the Bill would not apply. The purpose of including employment agencies is to pick up those employment agencies that have some sort of contractual relationship with the worker and to ensure that employing businesses do not have a loophole whereby they can say, “Oh, we’re an employment agency.”

Patrick McFadden: I understand my hon. Friend’s point, but elsewhere in the Bill there is talk of joint and several liability between end-users and employment agencies for infringements of the Bill. Although he is right to say that our normal understanding would be that there is no ongoing relationship between the head-hunter and the person that they place in a permanent post, I am not sure that the Bill clearly excludes those head-hunters from its reach. Whatever other differences there are between us, I hope that my hon. Friend agrees that we should focus the discussion on people who are placed in temporary posts, however they are defined.
It is surely not our intention to start legislating for equal pay, perhaps unintentionally, in the field of head-hunters and permanent placements. Whether the amendment is the right way to deal with that, or whether my hon. Friend the Member for Ellesmere Port and Neston wishes to table his own amendment is a matter for him to consider. Both the draft European directive, which serves as the backdrop to the Bill, and any discussions around it have always focused on temporary agency workers. It has never been the intention to legislate in a way that would affect the recruitment industry as a whole when it places people in permanent posts.
Definitions are important, but I am not sure that they are clear at the moment. At the least we should ensure that the Bill focuses on temporary agency workers, which I believe is its intent given what it says in its long title. Whether the definitions do that is at least open to question.

Greg Knight: I agree with the hon. Member for Ellesmere Port and Neston when he says that we need to get this right. This is not a debating society; we are legislating. I share some of the concerns that the Minister has expressed and the concerns expressed by my hon. and astute Friend the Member for Shipley. It seems that the provision that we are now being invited to support goes far wider than perhaps the hon. Gentleman intended and would indeed include head-hunters.
When I was studying law, to earn extra money, I undertook part-time work with an employment agency that dealt exclusively with the entertainment sector. It provided comedy acts as well as musicians and bands for venues. Occasionally, bands asked it to supply temporary musicians when a musician was ill. For example, the late Syd Lawrence had a large—I think 35-piece—orchestra and, occasionally, if a trombonist fell ill, an employment agency dealing with musicians would be asked to send a musician to deputise. Invariably in my experience, in that scenario, the dep-musician was paid less than the permanent members of the band.
It seems that the Bill would go into the entertainment area in a way I am sure that the hon. Member for Ellesmere Port and Neston did not intend. If an employment agency dealing with musicians supplied a dep-musician to a band on a lower salary, the Bill would enable that deputising musician to sue the employment agency because the band leader did not pay him same as a valued and perhaps long-term member of the orchestra. For those reasons, the hon. Member for Solihull is right to seek to remove from the Bill the inclusion and encompassing of employment agencies.

Adam Price: If the Bill is passed, it will be illegal for the end-user to pay the lower salary to the temporary worker in any case. Therefore, would it not be right to ensure that employment agencies were aware of that and that they did not enter into any kind of relationship with an end-user that was seeking to do something against employment legislation?

Greg Knight: That is all very well and it probably would be reasonable if we were discussing staff who were employed as cleaners given that cleaning a floor is the same job whether someone has been there two or three years or two or three weeks. But applying that same rule where we are dealing with artistic ability and talent would be oppressive in the extreme. It would be saying, for example, to a trumpeter of the ability of the late Harry James or the late Eddie Calvert that they could be paid only the same as the most mediocre trumpeter in an orchestra. That goes against the whole history of show business. To win wider support for the Bill, the hon. Member for Ellesmere Port and Neston has to get over the fact that the clause is too wide. It goes too far.

Andrew Miller: I understand where the right hon. Gentleman is coming from, particularly as we now see the genesis of MP4. At the time he is talking about, a zero-hours contract essentially provided for him to slot in to make up the numbers in a band from time to time when someone was sick. Had he decided to take the more radical line of some of his colleagues on MP4 and tried to recruit people to the Musicians Union, or some such organisation, he could legitimately have been sacked for doing so as he had a zero-hours contract. That problem goes back to 1983, which perhaps I will tell the Committee about, if I catch your eye, Mr. Hancock.

Greg Knight: That is a totally different point. I am not saying that temp musicians who work on a temporary basis should have no rights at all, but there is a justifiable argument for paying some musicians in a band or orchestra more than others, because of the talent that they bring to that entertainment unit.

Jim Dowd: There is a contradiction here. If we were talking about the general hierarchy of an orchestra, we could understand that point. However, if I have understood the circumstances outlined by the right hon. Gentleman, we are talking about circumstances where, if someone was ill or indisposed, and someone else was needed to take their place at short notice, that person would be obtained from an agency. Surely, if that person was not up to the skill or standard required, they would not be an adequate replacement. The thrust of the Bill is that where people are of similar skills and abilities, one should not be disadvantaged simply because they acted in a temporary capacity, compared to those who are there full time. It is not a question of comparative skill across the piece.

Greg Knight: That argument cannot apply when one looks at the entertainment industry. There will always be situations where someone is of exceptional talent and is paid, because of that talent, to remain in a band or orchestra. During a period of illness, the orchestra leader is willing to carry on engagements, perhaps with a slightly reduced ability in his band, but all he needs is a replacement musician who can play in tune and read music. He may still wish to maintain the higher salary for the permanent member of the band who is ill. What is wrong with that? Why should he or she not be allowed to do that?

Philip Davies: I agree entirely with my right hon. Friend. Does he agree that in relation to the amendment, even if one accepts the arguments given by the promoter of the Bill, the issue is about whether it is the end-user who should be held responsible for ensuring that terms and conditions are met, or the employment agency that merely signposted the person into the job? Even with the amendment, the end-user would still be included in the clause; it would merely take away any responsibility from the employment agency that does not actually employ them.

Greg Knight: That is a very good point. The amendment moved by the hon. Member for Solihull is not perfect, but it is a step in the right direction. That is why I indicated my support. My hon. Friend is right. In the scenario that I have described, the Bill would mean that the bandleader would be legally responsible, as would the entertainment agency that supplied the temporary musician. Once his two or three-week engagement was over, the temporary musician could then sue the bandleader for discrimination under the Bill, and sue the agency that provided the job. That is not right, and I would like to think that the hon. Member for Ellesmere Port and Neston did not intend that scenario to be covered by the Bill.

John Heppell: For a moment I thought that these circumstances were the exception that proves the rule, but the music and entertainment industry is different from most other things. However, one thing is similar. The point is that if somebody was at lower level, the bandleader might want to carry on with what would probably be a different format—if there was no Eddie Calvert to do the solos, it would be a different show. Under those circumstances, if he employed someone else directly instead of going to a temporary agency and did so on a lower salary, there would be no conflict. We need to consider if there will be a difference if someone is employed directly or on a temporary basis because they should be treated the same. If the intention of the bandleader was to employ somebody directly on a lower salary, the right hon. Gentleman could legitimately justify what he says about someone below standard being paid less on a temporary basis.

Greg Knight: These interventions show that if the Bill goes ahead in its present form, the whole subject will become a lawyer’s paradise. If the Bill looks as if it will get on the statute book, perhaps I should renew my practising certificate because I can see dispute after dispute arising.

Julie Kirkbride: My right hon. Friend raises an important subject. Perhaps we should consider a less glamorous, more straightforward form of employment than the one he clearly knows a great deal about, such as teaching. Let us consider the example of someone taking over from a teacher who had been at the school for many years, and who was on the enhanced salary offered by the Government to encourage good teachers to stay in the classroom. Would it be reasonable to employ someone who might have just come out of college to teach that class for that term, at the same enhanced pay rate that the teacher who was destined to teach the class for that academic year would have received?

Greg Knight: I thank my hon. Friend for her intervention. The example she gives is more difficult to deal with because it could be argued that clause 1(2) addresses that issue, whereas the music industry would be caught by the Bill, which would lead to a lot of difficulties. Everything is capable of being resolved, and I would be much happier if the hon. Member for Ellesmere Port and Neston said that he would accept from me an amendment to exclude the entertainment industry from the Bill in cases where the differentials relate to the circumstances I have described.

Andrew Miller: I understand the right hon. Gentleman’s concern, but clause 1(2)(b) states that the provision applies only if
“the treatment is not justified on objective grounds.”
He is quite right: the example of the measured capacity of a teacher or a nurse could easily be covered by that. Some of the examples that he gave related to subjective judgments about artistic value; nevertheless, the training, skill and earning capacity of the musician are objective measures that could be used. How does he separate his example of an arts teacher from an artiste in a band?

Greg Knight: This is a difficult area, and that is why my hon. Friend the Member for Huntingdon got a bit excited when I said I would be less unhappy with the Bill if it excluded entertainment, to which he said sotto voce, “Only entertainment?” The entertainment industry will have real difficulties with the Bill because musicians are paid not only in accordance with their merit, but with the history of where the band, orchestra or group comes from. For example, I know of cases where an act had minor national success in the pop charts and then a member left. a new member was recruited—sometimes through an agency—to take the place of that person, but because the band was established before that new member joined, they were put on a salary and received no percentage of the profits from the sales of the record that was a hit before they joined. It could therefore be argued that that person was treated unfavourably, and that they have a right of action under the Bill and could sue the employment agency for offering them a contract on terms less favourable than those of any other band member, when their musical ability may exceed that of other members of the band.
I hope that the hon. Gentleman will reflect on the difficulties that the Bill would present for the entertainment industry. I have used musicians as an example, but the difficulties would apply to other areas such as circus acts and dance troupes, which need to be exempt from these provisions. All that we have before us is the modest amendment moved eloquently by the hon. Member for Solihull, and as that is all that is on offer, I will support it.

Frank Doran: There are a lot of red herrings flying around. I was interested in the approach taken by the right hon. Member for East Yorkshire, who is himself a musician of some standing—a rock giant to some of us. He knows the industry much better than I do, but I am old enough to remember Eddie James and Eddie Calvert. They were never looking around for work and never used anything other than their agents to get them prime appointments, not fill-in appointments in a band. There may be problems with other aspects of the music industry.
I want to talk about my experience in this field, which is mainly as an employer. Like the right hon. Member for East Yorkshire, I am a former solicitor. I no longer have a practising certificate, but he is absolutely right that there could be lucrative work here. Often in my practice, I had to use agencies. I always used registered employment agencies, because I knew that there was at least some scrutiny of the way in which such businesses operated. I always looked for businesses that I thought were reputable, because I thought that that would give me the best chance of getting the sort of person whom I wanted.
Usually, I needed people such as secretaries for short fill-in jobs. I do not think that many solicitors were available from the employment agencies that I used, but I know that agencies now exist in specialised areas such as engineering, accountancy and law. All sorts of professions and skills are now available in the market. The contract was between me and the agency—I had no say in what the individual was paid. Very few of them stayed long enough for me to find out what they were paid. As I understand it, that remains the case.
I would not have been interested in what is described in the Bill as “an employment business” because I wanted something that had scrutiny and a registered regulation process attached to it. The Bill tries to deal with the sorts of agencies that come under less scrutiny, and such businesses might come into that category. However, that does not exclude employment agencies, the requirements on which seem to have loosened over the past 20 or 30 years. The scrutiny that used to be available when I was a practising solicitor in the ’70s and ’80s seemed to be quite a serious and onerous requirement. I am not sure whether that is the case now.
The Minister was right to raise the point about head-hunters. My only experience of working with a head-hunter came recently when working in this place. I was on the interviewing panel for a very senior Official of the House. Head-hunters were appointed, and as I recall, the House was responsible for the advertising. The head-hunters’ job was to scrutinise the people who applied, to put tentacles out to find other people and to encourage people to apply. The result of that process was selection by interview by a panel of people appointed by the House, including Officers of the House; myself, representing Members; and an independent person representing outside industry. The contract with the head-hunting agency was simply to do the trawl and the filter. The relationship with the person employed is between the House and the individual, with a normal employment contract featuring statutory terms and conditions and so on. I do not see why head-hunters come into this process at all. The vast majority are employed to find employees, not to act as an agency in the sense that I understand it. That is quite a different situation.

Philip Davies: Head-hunters potentially come into the process because of the definition of “employment agency” in the Bill. An employment agency is a business that provides services
“for the purpose of finding workers employment with employers”.
That is what head-hunters do, and that is the definition of employment agencies in the Bill.

Frank Doran: My recent experience, which I admit is not profound or wide, is that the head-hunter is involved in the search for the employee, but the employer makes the final choice. That is the difference. In my view, head-hunters do not come within the definition of employment agencies in the Bill. It is open to argument because some head-hunters may operate differently.

Dawn Butler: The definition of employment agency uses the phrase
“finding workers employment with employers”.
That clarifies the position, in that head-hunters find the individual, not the employment.

Frank Doran: I agree entirely with my hon. Friend. Such matters are open to debate and argument, which is why we are here.
I believe strongly that employment agencies should be included. If they are excluded, there would be a route for disreputable business to get underneath the terms of the Bill and to avoid the provisions that we trying to implement. That would be unfortunate and it would completely undermine the process. I am sure that we will have plenty of opportunity to discuss later the serious problems facing those at the lower end of the employment spectrum who do not get the rate for the job, who operate under appalling terms and conditions, and—going against one of the Government’s main employment objectives: to improve the skills of the work force—who tend not to be trained. We have a substantial cohort of vulnerable workers. If removing the legislation’s application to employment agencies drove a coach and horses through that protection, I would be extremely concerned.

Lorely Burt: All Members of the House have enormous sympathy with exploited, vulnerable workers. The hon. Gentleman talked about unscrupulous employment agencies trying to get underneath the Bill. Does existing employment legislation not cover the activities of unscrupulous employment agencies? Does he not agree that the problem is not with the law but with its enforcement, and that the unscrupulous agencies to which he referred are breaking the existing law, which we need to enforce?

Frank Doran: The hon. Lady makes a good point, but a huge amount of money is invested by the Government to enforce, for example, the minimum wage provisions. A lot of the exploitation that we are talking about takes place under the radar. We need tougher measures to ensure that existing regulations and legal requirements are met. The Bill is part of that process, which is one reason why I support it.

Patrick McFadden: I want to ask my hon. Friend to go back to what he was saying about head-hunters. Does he accept that the Bill should not cover head-hunters? That is a different issue from what we normally talk about in the field of agency workers. Does he accept that if, inadvertently, the Bill covered them, it would have to be changed?

Frank Doran: If head-hunters along the lines that I described in my earlier comments were covered, I would be concerned. It seems to me that they are not operating as employment agencies, but as agents to find employees of a particular brand and definition. We can look at the issue as the Bill progresses.

Jim Dowd: Is it not the case with the head-hunters that the commercial and contractual relationship is between the potential employer and the head-hunting company? There is no commercial relationship between the head-hunting company and the individual identified for potential employment by the employer.

Frank Doran: That is exactly right. I thank my hon. Friend for that. To repeat what I said earlier, I oppose the hon. Lady’s amendment.

Philip Davies: It is a pleasure to serve under your chairmanship, Mr. Hancock. I would like to start by congratulating the hon. Member for Ellesmere Port and Neston for getting his Bill to this stage, which is an achievement in itself, particularly when opposed by all the main parties’ Front-Bench Members. There will be plenty of time to discuss our fundamental disagreements over the Bill as a whole, but this debate is to do with the modest amendment moved by the hon. Member for Solihull, with which I agree wholeheartedly. There are some fundamental disagreements about the principles, and some of the comments we heard today were an example of 1970s socialism of which Arthur Scargill would have been proud.
I would like to focus on the point about removing employment agencies from the clause. We seem to have got ourselves into a bit of a muddle over definitions and what would and would not apply under the Bill. Although I oppose the Bill in its entirety, even those who support the Bill and its intentions ought to reflect further on the organisations they would be including. Following on from the speech of my right hon. Friend the Member for East Yorkshire, which I thought highlighted some of the issues particularly well, the hon. Member for Aberdeen, North said that, in his experience, musicians—certainly the top ones—did not have to go to employment agencies to find work. They found work through their agents. What struck me as a result of that remark was whether agents themselves would be included in the definition of employment agencies.
It is important that we look at the definition of employment agencies, as specified by the Bill. It states that
“‘employment agency’ means the business (whether or not carried out with a view to profit and whether or not carried out in conjunction with any other business) providing services...for the purpose of finding workers employment with employers or of supplying employers with workers for employment by them”.
That is what agents do when representing particular clients. They are finding employment for workers with employment. Clearly, in the Bill’s definition, the agents themselves would be included. However, the hon. Member for Aberdeen, North was saying that that was nonsense, because people found work through agents, as if they would not be applicable. None the less, it strikes me that employment agencies would apply under the clause, if we do not remove them from the clause.
The definition is helpful, because it makes it clear that it is
“for the purpose of finding workers employment with employers or of supplying employers with workers for employment by them”.
That is perfectly clear. The employment agencies have nothing to do with the employment of the people concerned, but are merely finding those people jobs. At that point their relationship with them ends. That is perfectly clear in the definition. What would strike me as bizarre is a situation in which an employment agency, having done its job—having found a worker a job with an employer, or an employer a worker—would be left with an endless liability into the future, lest at some point the end-user, the employer, decided not to honour the terms and conditions for those entitled to them. Why on earth should the employment agency have an ongoing liability when its part of the deal has been done satisfactorily on behalf of both the employee and the employer? The agency might do its bit perfectly well, yet the Bill would leave it in limbo.

John Heppell: In those circumstances, though—if the employment agency had done its job to the satisfaction of the employer and the employee—presumably the employee would not take action against the agency. They would take action against the end-user who broke the contract with them.

Philip Davies: I am grateful for that helpful intervention, because that is my point entirely. I do not accept the premise of the Bill, but even if one does, the root of the solution to any particular problem clearly lies with the end-user. Even with the amendment tabled by the hon. Member for Solihull, clause 1 would still provide for people to take the end-user to task.
The point is whether the employment agency should be included all. Given that the end-user is included and that redemption can be sought through that end-user, it serves absolutely no purpose to list employment agencies in the Bill. It will serve only to create uncertainty for agencies. As the hon. Member for Nottingham, East said himself, it will not make any difference for the employee.

Greg Knight: Has the hon. Member for Nottingham, East not missed the point? If an aggrieved worker went to the hon. Member for Aberdeen, North—let us say that he resumed his law practice in Scotland, having lost his seat—the advice that he would get is, “Your rights, sir, are not only to sue the employer but to sue the agency. We think the employer may be short of funds or in financial trouble, so we advise you to go to the agency first.” That is what the Bill provides for.

Philip Davies: My right hon. Friend is entirely right. He has highlighted astutely the can of worms that we may be opening. In fact, it may go further than that. The solicitor might say, “Well, you might not want to upset your employer, because that’s who you’re employed by. Rather than pursuing your employer, who you don’t want to get on the wrong side of, why not go for the employment agency instead? You’ve got no dealings with them whatsoever. You’ve got nothing to lose at all by having a go at them.” According to the Bill, the agency will be just as liable as the end-user. The clause makes no difference between them. The employment agency may end up being the one left in the firing line, even though we on the Committee all seem to agree that the employment agency would not be responsible at all for the situation in which such employees found themselves.
In terms of the bureaucracy involved in recruiting people from employment agencies, we might end up in a difficult situation. At the moment, an employment agency can find somebody a job under terms and conditions acceptable to both the employee and the employer. Under the clause, if it transpires that some people in the firm are paid differently, the employment agency, even if it had no prior knowledge of that, might find itself liable for a problem that it could not have anticipated and for which it was not responsible, even though the employee and employer were both happy with the terms and conditions of recruitment at the time.
If it transpires further down the line that some people are being paid differently, employment agencies might be held responsible for that too. That could mean that in order for any employment agency to find work for an employee, it would have to ask the employer to hand over all files on the pay, terms and conditions of all the people who currently work in the firm, to ensure that nobody it places in that firm is being disadvantaged in any way. I used to work for Asda, which employs between 120,000 and 130,000 people. It often took on temporary workers at Christmas and Easter, when there is a bit of a rush on in the stores. If employment agencies had to go through the rigmarole of checking up on the pay, terms and conditions of all Asda’s employees just to ensure that nobody would be disadvantaged by comparison with anybody else who worked there, who on earth would want to start up an employment agency?

Dawn Butler: Is that not in some respects the point of the Bill, in the sense that the employment agency and we, under the Equal Pay Act 1970, should be looking at transparency with regard to the pay and conditions of employees to ensure that they are paid a reasonable wage for their job? Is that not part of the premise of the Bill?

Philip Davies: I understand the hon. Lady’s point, but that is where the difference lies. She is saying that people should be paid a fair wage for their job, but that is not what we are discussing: we are discussing whether people should be paid an equal rate for their job. As my right hon. Friend the Member for East Yorkshire made clear, there are many good reasons why people should not be paid equally for their jobs. Many employers want, for example, to reward people’s loyalty over long periods of time with higher pay, better terms and conditions and longer holidays. That seems to be a perfectly reasonable way to reward people who have been loyal to a firm for a long period. The hon. Lady seems to be mixing up paying and treating someone fairly with treating them equally, but there is a huge difference between the two. Ensuring that people are not treated in a manner that is not equal would put a massive burden upon employment agencies to find out huge swathes of information before they could confidently place someone with an employer, even though the employee was happy with their terms and conditions at the time.

Julie Kirkbride: I very much agree with my hon. Friend’s argument, and it invites a question about how people could establish the information that would protect them from any legal suit. They would have no right to know that information.

Philip Davies: Indeed, my hon. Friend makes a good point. Obviously, much of that information might be covered by data protection in the first place or might be commercially sensitive. For example, an agency might provide workers for different firms within the same sector, but a business should not really be expected to give out its terms and conditions to an agency that might be able to pass that information on to a competitor. We would open up a huge can of worms simply by including employment agencies in the scope of the clause. The hon. Member for Solihull was astute in spotting that potential flaw, and that is why she is moving her amendment to make them exempt.
We have many fundamental disagreements about the principle of the Bill and its practicalities, but even if one accepts the premise that people should be given those rights, given the definition of employment agencies in the Bill, I do not see how on earth any employment agency could end up with a lasting liability for any unfair treatment when it is clearly not their responsibility. Furthermore, that group would clearly include head-hunters, as the Minister made clear, because their sole purpose is to find workers for employers. That is clearly an unfair burden to put on them.
The hon. Member for Ellesmere Port and Neston pointed out that subsection (2)(b) states that subsection (1) only applies if
“the treatment is not justified on objective grounds.”
As my right hon. Friend the Member for East Yorkshire made clear, that could be a lawyer’s gold mine, because there will be differences of opinion on what constitutes objective grounds. The hon. Member for Ellesmere Port and Neston, who I know to be a perfectly reasonable man, might come up with a definition of objective grounds that is perfectly reasonable. All of the members of the Committee might well come up with their own definitions of objective grounds that are particularly reasonable, but we are supposed to be setting legislation that is clear cut and will give employers and employment agencies some kind of certainty that what they are doing is fair. Simply having a rather vague line that seems to have been thrown in at the last minute to try to overcome any potential pitfalls by saying that the treatment is not justified on objective grounds seems to offer no certainty for employers or employment agencies to go about their legitimate daily business.
If the clause is not amended in the way that the hon. Member for Solihull proposes, the provisions would be worse for employment agencies, who would have long-lasting liabilities that they would not be able to control. It would be worse for the employees, because I cannot imagine many people wanting to take on such a potential liability, and therefore there would be far fewer employment agencies to find people work with employers. I cannot imagine many people wanting to take on such a potential liability.

Greg Knight: Although my hon. Friend and I have ongoing objections to the Bill for other reasons, does he agree that it would be far less objectionable if it excluded employment agencies acting in the narrowest sense—in other words, those acting as mere facilitators, with no ongoing contractual relations with the worker?

Philip Davies: My right hon. Friend is right in the sense that the clause would certainly be a lot less objectionable, which would make the Bill less objectionable. However, the Bill would still be objectionable, albeit slightly less so. I go some way towards accepting his point, but I would not want to mislead anybody into thinking that accepting this rather modest amendment would suddenly make the Bill all hunky-dory; the Bill would still be fatally flawed, although slightly less so.
My right hon. Friend does, however, make a valid point. As everyone has said, the clause should not include head-hunters and those who simply pass others on for a job and then have no further relationship with them. Everybody has accepted that point. That is why I thought that the hon. Member for Ellesmere Port and Neston made a useful distinction between employment businesses and employment agencies. Even if we accept the amendment, employment businesses would still be covered by the clause. Those who still have an ongoing relationship with such businesses would therefore still be covered, as would the end employer. The amendment would simply remove from the equation those who do no more than find somebody a job that they are happy about with an appropriate employer and who then have no further dealings with that person. The amendment in the name of the hon. Member for Solihull is modest, but it would improve the clause considerably. I support it on that basis.

Adam Price: It is a pleasure to serve under your chairmanship, Mr. Hancock. It looks as if we might have a very long summer ahead of us, although I fear that the hon. Member for Shipley will never be satisfied—we shall see. As a member of the only party represented on the Committee whose official policy is to support the Bill, I think that I have a duty to say something at this stage.
The hon. Member for Solihull said that this was a probing amendment, and it has raised some interesting issues.

Lorely Burt: This is not a probing amendment. Unless the hon. Member for Ellesmere Port and Neston amends or withdraws the relevant provision, I shall press the amendment to a vote.

Adam Price: I am suitably admonished. I was trying to tempt the hon. Lady in my direction, but it did not work.
Nevertheless, the amendment has raised some interesting issues, and some of us may not be as far from each other as we appear to be. I cannot speak on behalf of the hon. Member for Ellesmere Port and Neston, but those of us who support the Bill did not intend, for example, recruitment consultancies working for investment banks in the City of London to be caught in the net of the Bill. Although the workers they deal with might now be vulnerable, given the way the economy is, they are not vulnerable in the sense meant in the Bill.
The fear expressed by several hon. Members—we are not lapsing into a conspiracy theory—is that if the Bill were passed, some employment businesses could reinvent themselves as employment agencies or mask their employment business-related activities so that we ended up with exactly the same circumstances. For example, there is the construction industry scheme under which groups of workers are recruited by employment agencies. They are technically self-employed, and that allows the end-user to avoid giving them the same set of rights and conditions that they would enjoy as direct employees.
 Philip Davies rose—

Adam Price: Casualisation provides huge advantages to employers, and no doubt the hon. Member for Shipley is about to say, “No bad thing either”.

Philip Davies: The hon. Gentleman’s fear that employment businesses will become employment agencies is misplaced. This is not self-definition. It is not the businesses that define what they are. The definition is in the Bill. The nature of the service that businesses provide is covered in the Bill, and so the term “employment agency” can be removed without any fear that people will define themselves in a different way.

Adam Price: Yes, but what I fear is a much broader restructuring of the labour market, whereby people who may be currently employed through employment agencies may be encouraged to become self-employed on short-term contracts. Contracts would be constructed to allow that to happen, as in the construction industry. Some 20 per cent. of workers in the construction industry are self-employed and recruited through employment agencies. They do not work for employment businesses or the end-user. They are vulnerable workers. In the terms of the Bill, they are temporary agency workers. The Bill would allow us to protect those workers, because it includes employment agencies under its rubric.
The right hon. Member for East Yorkshire raised some fair points in relation to specific sectors. Concerns have also been raised in other sectors where there are high net value employees—for example, engineering and IT consultants. They are concerned that their circumstances could be disadvantaged by the Bill because they have secured advantages from flexible labour markets and casualisation. They are highly skilled—many of them have a unique set of skills and are in high demand—and it suits them to have flexible short-term contracts. The situation is perhaps similar in parts of the creative industries. One could argue that the lower the skill level and the seniority level—even within the creative industries—there is exploitation, in particular of younger workers at the bottom.
We need to be mindful that in some sectors and in some circumstances there perhaps needs to be specific exemptions. We are not talking about vulnerable workers but about workers with unique sets of skills. The hon. Member for Ellesmere Port and Neston alluded to that. In economics we refer to economic rent; even individuals have a unique value in the marketplace. For example, it is almost impossible to compare professional footballers like for like. The only way to do that is through the marketplace, where a price is set for them. In certain sectors, right at the top of key industries, we are talking about a wholly different set of circumstances to those of vulnerable workers who are exploited by disreputable employment agencies and employment businesses. At this stage, it is better to have an expansive definition, and if there are sectors and particular circumstances in which it is clear that exemptions should be made, that can be done at a later stage.

Julie Kirkbride: The hon. Gentleman points up a difficult aspect of the Bill, which is that there are many groups in very different circumstances. There are people at the top of the pile, as well as people who are undoubtedly exploited. Conservative Members accept that there is a case in some areas. However, I can think of other groups, perhaps women who have children, who could be seen as vulnerable because—

Mike Hancock: Order. At this rate we could be here till the recess.

It being twenty-five minutes past Eleven o’clock, The Chairman   adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till Wednesday 14 May at half-past Nine o’clock.